Birmingham Council’s in-house catering company has cooked up a storm by claiming it was forced by red tape to spend £7,000 on a computer it did not want or need.

A watchdog committee has dubbed the situation “ludicrous” – and backed Civic Catering’s call to break free of direct council control.

The firm has asked to be given financial independence after alleging it has been forced to waste cash on equipment and agency staff.

It claims it is hamstrung by bureaucracy. Civic Catering has had to pay thousands extra for dozens of staff because of a council recruitment freeze on permanent positions.

It says it paid the authority’s IT supplier, Service Birmingham, £7,000 for one computer at Highbury Hall, which it did not want.

Council contracts watchdog committee chairman Majid Mahmood (Lab, Hodge Hill) said: “I find it rather bizarre that, due to a council recruiting freeze, we have been paying £40,000 for agency chefs over five years when they could have directly employed them for about £25,000. There should be a time limit on agency staff – after which we take on staff.

“Not only that, but our in-house IT supplier is charging £7,000 for a computer, which we are told does not even come with wi-fi.”

Head of Civic Catering Muir Wilson said: “If we had a realistic budget and were allowed to compete in the market we could grow the business. We have had long-term agency staff for five years which we are forced to pay for. We would love to employ them on our own terms.”

Under the independence of council’s arms length Acivico company, they would borrow £350,000 to upgrade kitchen facilities at the council and bid for a wider range of contracts.

The company currently hosts wedding receptions and conferences and provides food at the Council House and Highbury Hall. It also runs canteens and vending machines at council offices, the Old Rep Theatre and West Midlands Fire Service HQ. It has won the contract for the new Library of Birmingham and is bidding for the Town Hall and Cockmoors Woods Leisure Centre.